Capital gain treatment (flat transfer) (cost of acquisition)

One Assessee has transferred a Flat for Rs. 50L

 

My question is regarding cost of Acquisition & Cost of Improvement.

The assessee had paid total Rs. 15L towords purchase of Flat on installment basis.

The assessee had paid 1st installment  of Rs. 1.5L on August 2007

and remaining 9 installment on quarterly basis of Rs. 1.5L each.

 

Whether 1st Installment can taken as Cost of Acquisition & remaining installment as cost of improvement?

 

Kindly let me know about the treatment of the above case.

Replies (8)

no the amount can't be treated as a cost of improvement. it can be included in cost of asset (exculed interest in instalment).

Please mention the section in which the treatement of this has been specified.

REFER AS-10

I need Tax treatement not Accounting Treatement. Please let me know about in this regard with reference to Income Tax Act, 1961.

The instalments paid are not improvement costs but acquisition costs only. Hence, the entire amount should be indexed from the year of acquisition.

asset cost consider in income tax same as accounting at the time of aquisation. only deprecition rate may be differ b/w accounting and income tax.

Hi, it is cost of acquisition. Cost of acquisition is the value of asset acquired, the payment pattern donot alter the treatment. Just because installment is paid it doesn't mean COI is differed till last installment is paid. The payment has nothing to do with the treatment. As long as asset is acquired legally the position of COI doesn't get altered with different types of payment.
Pls substitute COI with COA. Sorry for inconvenience

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